Question: An evaluation is required as to whether the entity is acting as a principal or an agent. Which one of the following statements is reasonable?

An evaluation is required as to whether the entity is acting as a principal or an agent. Which one of the following statements is reasonable?

Fly Aways Inc. provides a right to fly (i.e., a plane ticket) to Mrs. and Miss. Kim from Perth to Buenos Aires, with a Air Bound Inc. connecting flight in Auckland. Fly Aways Inc. must consider the principal indicators to determine whether it is a principal or an agent for the connecting flight.

Skyways Ltd. provides a right to fly (i.e., a plane ticket) Miss. Charles from Orlando to Melbourne, with a Airbound Inc. connecting flight in San Francisco. Skyways Ltd. does not control the connecting flight with Airbound Inc. therefore Skyways Ltd. is an agent for the connecting flight.

Arvo Air Inc. provides a right to fly (i.e., a plane ticket) to Mr. Flores from Johannesburg to Edinburgh, with a Way Up Ltd. connecting flight in Dubai. Arvo Air Inc. is flying only one of the planes therefore it is only a principal for its own flight because it only controls its own flight.

HNL Air Inc. provides a right to fly (i.e., a plane ticket) to Ms. Moore from Sydney to Chicago, with a US Flights connecting flight in Honolulu. HNL Air Inc. controls the plane ticket therefore it is a principal for the entire journey, in spite of the fact that it is using another airline for part of the journey.

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